CFA Practice Question

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CFA Practice Question

Assume a portfolio with 35% stocks (S), 35% bonds (B), and 30% in a mutual fund (F). The expected return from stocks is 12%, the expected return on the mutual fund is 7%, and the expected return from bonds is 5%. What is the expected return on this portfolio?

A. 8.00%
B. 8.05%
C. 8.15%
Correct Answer: B

The expected return for the portfolio is calculated as follows: E(R) = 0.35 x 12 + 0.35 x 5 + 0.3 x 7 = 8.05%

User Contributed Comments 5

User Comment
BayAreaPablo Watch out for the E(Mutual Fund) = 7% and E(Bond)=5%. If you switch these (due to fast reading) you will get 8.15%.
joe3 should be careful during the test.
I got the 8.15% :-(
surob Luckily, I got it right. Good one for the practice
AUAU Watch out.
CFA exam may like this.
hemraj007 lol i got this 8.15%
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